California Supreme Court: Parties to a Real Estate Transaction Can Create Implied Exclusive Easements
This post was authored by Daniel Zarchy, a “Rising Star” for five of the past six years who is a litigation attorney at Patton Sullivan Brodehl LLP.
In the recent case Romero v. Shih, the California Supreme Court clarified that under California law, parties to a real estate transaction may create an implied easement that effectively grants the dominant tenement exclusive control over the easement, although the Court stressed that there must be strong evidentiary support demonstrating the parties’ intent to do so.
Facts
The case features facts dating back to the early 1940s. Edwin and Ann Cutler purchased two adjacent parcels of land, building a house on the eastern parcel while building a planter and driveway that encroached about eight feet into the western parcel. The Cutlers apparently started the process of changing the lot line of the eastern parcel to include the driveway and planter, but never completed the process.
Years later, their son acquired the western parcel, built a house on it, and sold it to a third party, with the Cutlers still making use of the driveway and planter, although the legal description of the western parcel did not mention an easement or use of that section of the land by others.
Decades later, the Romeros acquired the western parcel and the Shih-Kos acquired the eastern parcel. At the time, neither family seemed to realize that although the eastern parcel used the driveway and planter, they were technically part of the western parcel. The Romeros later realized the situation and sued, asking the Shih-Kos to remove their encroachments and pay damages to the Romeros. The Shih-Kos cross-claimed, arguing that the Cutlers created an implied easement benefitting the eastern parcel when they sold the western parcel decades earlier.
Trial court and Court of Appeal
The trial court ruled for the Shih-Kos, but the Court of Appeal reversed, relying on case law relating to prescriptive easements. Because the Shih-Kos’ use of the driveway was exclusive – in that it effectively prevented the Romeros from using that portion of their land – the Court of Appeal held that the Shih-Kos would have needed to meet the requirements of adverse possession to gain an implied easement, including payment of taxes on the land underlying the asserted easement. Because the Shih-Kos had not done so, the Court of Appeal found for the Romeros.
California Supreme Court
However, the California Supreme Court reversed the Court of Appeal’s opinion, holding that the Cutlers may have created an implied easement when they originally sold the western parcel. The Court distinguished prescriptive easements, noting that doctrine has no connection to real estate transactions, through which express and implied easements can be created and the primary policy goal is to give effect to the parties’ intent.
The Court cited Civil Code section 1104, which the Court described as ensuring that when a grantor conveys real property but does not expressly grant an easement, the law infers that the parties to the transaction intended the conveyance to include “any preexisting uses of the grantors’ remaining estate that were obvious and permanent,” also known as an implied easement. The Court noted that the common law similarly supports the existence of implied easements, and that the grantee of a property may assume “not only the obvious benefits but the obvious burdens as well.”
The Court summarized that California appellate courts have long held that an implied easement can derive from a conveyance of property where “(1) the owner of property conveys or transfers a portion of that property to another; (2) the owner’s prior existing use of the property was of a nature that the parties must have intended or believed that the use would continue; meaning that the existing use must either have been known to the grantor and the grantee, or have been so obviously and apparently permanent that the parties should have known of the use; and (3) the easement is reasonably necessary to the use and benefit of the quasi-dominant tenement.”
The Court noted that the law is particularly harsh to exclusive easements, given that they entirely or almost entirely prevent the servient tenement owner from using that portion of their land. However, where the circumstances of a real property transaction clearly demonstrate the parties’ intent for the purchasing party to continue using the servient tenement, the implied easement, even if exclusive, will be created.
As a result, the Court held that implied exclusive easements are not barred by California law, and remanded to the lower courts to consider whether the Shih-Kos met their evidentiary burden of the parties’ intent.